Hewlett-Packard has slashed prices on its Visualise line of Risc-based workstations by as much as 40 per cent on its technical workstation machines, precipitating a bloody price war.
Across the board, Risc Unix workstation vendors are being forced to cut deeply into margins to compete with steep competition from Windows NT. Last week Digital cut prices by half on all its Alpha server and workstation products and Sun started cutting prices in November last year.
HP and Sun had to reposition their Risc Unix worksations, said Peter Lowber senior analyst at Datapro Information Systems of McGraw Hill in New Jersey. "A lot of NT pilots from last year are now coming to fruition and volumes are taking off," he said. "The pressure is on." Sun, he said, will follow suit with more substanical cuts on its Ultra range.
But Chris Sarfas, desktop marketing manager at Sun, denied today that the company is responding to pressure from NT. "We are well positioned in the market and we have just recorded a record quarter. We are not going to cut prices due to NT. We cut prices throughout 1996 but it was in response to the lower cost of memory products and now the other vendors are just following suit."
Lowber said Digital is well positioned for a price war. "Even before its latest round of price cuts it already had personal work stations selling at low prices," he said. "The Alpha personal workstation 500MHz is available for under $15,000 which is unbelievable. But Digital is the exception. Silicon Graphic?s pricing is too high."
SGI will roll out a new line of midrange workstations this month which will run two new MIPs 195-MHz R10000 processors. The systems are expected to support internal memory sizes of up to 2GB, a significant performance boost over the existing Indigo2 line. But prices will start around $25,000.
Lone Poulsen workstation program manager at market researchers IDC believes it isn?t SGI?s style to rely on pricing schemes. "SGI is unlikely to respond to this price war." said Poulsen. Price is not their primary selling point, he said. They look more closely into actual performance of system and offer higher graphics capabilities etc. she said. Poulsen also pointed out "The UK is one of the more competitively priced countries in Europe," he added.
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